BACK TO discount rate
discount rate vs. interest rate
- the rate of interest charged in discounting commercial paper.
- the interest rate charged by Federal Reserve Banks on loans to their member banks, usually against government securities as collateral.
- the rediscount rate.
[ in-ter-ist reyt, -trist ]
- the amount that a lender charges a borrower for taking out a loan, typically expressed as an annual percentage of the loan balance. Interest rate also applies to the percentage charged periodically on credit card balances.
- the amount earned on a savings, checking, or money market account, or on an investment, as a certificate of deposit or bond, typically expressed as an annual percentage of the account balance or investment sum.